Qantas acquires majority stake in online holiday business

Qantas (QF, Sydney Kingsford Smith) has acquired a 51% stake in Australian online travel company TripADeal, bolstering its presence in the rapidly growing A$13 billion online package holiday market (9 .2 billion) as leisure demand explodes and shifts to e-commerce continues.

Full terms of the cash purchase were not disclosed. Qantas will be able to acquire the remaining 49% of TripADeal in four years at an agreed multiple of the company’s bookings at the time, the parties said in a combined statement.

It is expected to significantly boost TripADeal’s revenue through Qantas Loyalty, the national carrier’s loyalty program for 14 million members. Qantas frequent flyers can use their loyalty points to book any TripADeal vacation package, regardless of which airline is part of the package. They also earn three points for every 1 AUD (0.71 USD) spent with TripADeal.

Prior to COVID-19, TripADeal had an annual growth rate of over 40%. In the 12 months before the pandemic, its bookings exceeded 200 million AUD (approximately 150 million USD), with monthly bookings significantly higher at present.

Qantas joins existing shareholders, the founders of TripADeal and private equity firm BGH Capital, who took a stake in 2020.

Qantas Group CEO Alan Joyce said Qantas Loyalty had performed well during the pandemic despite the lack of flights. Members had earned and used large volumes of points in the field, which translated into strong revenue for the Group. With a huge shift towards online holiday booking, participation in TripADeal meant Qantas would benefit from the strong growth that was to come, he said.

Qantas Loyalty is targeting a return to double-digit growth in 2022 and an underlying EBIT of 500-600 million AUD (357-428 million USD) by FY24. Profits from the majority stake in TripADeal will contribute to this goal.

Qantas said its investment in TripADeal comes on top of the group’s previous capital expenditure guidance. Net debt was still expected to reach the bottom of the Group’s target range by the end of fiscal 2022.

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